Question: Question 1 (15 points) You decided to convert a 5-year Treasury into a set of stripped securities below on October 15, 2019. Calculate the total

Question 1 (15 points) You decided to convert a 5-year Treasury into a set of stripped securities below on October 15, 2019. Calculate the total present value of these securities based on the prices in the stripped interest and stripped principal markets. Would you profit from stripping this Treasury Note? Assume that the original Treasury has a face value of $1,000,000. - U.S. Treasury (hypothetical Data) at as 15 Oct 2019 COUPON PRICE YIELD CHG 10-Year Note 99.415 0.000 7-Year Note 1.425 0.000 1.625 98.012 10/15/2024 1.235 97.742 0.000 10/15/2022 1.175 97.451 0.000 10/15/2021 1.05 97.345 0.000 10/15/2020 0 96.972 0.000 04/15/2020 0 96.878 0.000 01/15/2020 0 96.241 I 0.000 11/15/2019 95.873 0.000 Hypothetical US Treasury STRIPS Prices and Yields 15 19 Asked Askedeld Maturity Bid Add Maurity Striped Principal 15.Nov.19 98.404 Asked yield Stripped interest 15-Nov19 15.Dec. 19 2.28 2.401 234 15-Dec-19 97.904 2.643 15 Apr 20 15.Oct 20 99.443 57.473 92.193 2.85 92.7 97.0 96.735 9653 15-Apr-20 15-01-20 15 Jan 21 15-Mar21 15-Apr 21 15-01-21 15.Dec.21 15-Apr 22 15-22 15-Apr-2 15.04.2 15-Apr-24 15 Mar 21 15-Apr 21 15-01 IS-Des 21 3.122 3.24 312 3456 SS15 52 95.58 15-22 15- A23 15.023 - A24 104 9713 5035 Question 1 (15 points) You decided to convert a 5-year Treasury into a set of stripped securities below on October 15, 2019. Calculate the total present value of these securities based on the prices in the stripped interest and stripped principal markets. Would you profit from stripping this Treasury Note? Assume that the original Treasury has a face value of $1,000,000. - U.S. Treasury (hypothetical Data) at as 15 Oct 2019 COUPON PRICE YIELD CHG 10-Year Note 99.415 0.000 7-Year Note 1.425 0.000 1.625 98.012 10/15/2024 1.235 97.742 0.000 10/15/2022 1.175 97.451 0.000 10/15/2021 1.05 97.345 0.000 10/15/2020 0 96.972 0.000 04/15/2020 0 96.878 0.000 01/15/2020 0 96.241 I 0.000 11/15/2019 95.873 0.000 Hypothetical US Treasury STRIPS Prices and Yields 15 19 Asked Askedeld Maturity Bid Add Maurity Striped Principal 15.Nov.19 98.404 Asked yield Stripped interest 15-Nov19 15.Dec. 19 2.28 2.401 234 15-Dec-19 97.904 2.643 15 Apr 20 15.Oct 20 99.443 57.473 92.193 2.85 92.7 97.0 96.735 9653 15-Apr-20 15-01-20 15 Jan 21 15-Mar21 15-Apr 21 15-01-21 15.Dec.21 15-Apr 22 15-22 15-Apr-2 15.04.2 15-Apr-24 15 Mar 21 15-Apr 21 15-01 IS-Des 21 3.122 3.24 312 3456 SS15 52 95.58 15-22 15- A23 15.023 - A24 104 9713 5035

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